It noted that in Singapore, regulators are “very much against” one player achieving market dominance.

But it saw several scenarios for Comfort if the deal proceeds: For one, Comfort may continue to acquire Uber’s car-rental fleet and it could renegotiate the terms, as well as potentially partnering with Grab instead of Uber, it said.

Comfort could revisit Uber terms

Additionally, Comfort could call off its Uber deal and Grab could acquire Uber’s car-rental fleet and booking app, but that appears less likely as Grab’s currently model is to partner with vehicle-rental companies, instead of owning vehicles in house, Maybank KimEng said.

Finally, Maybank KimEng noted that UberFlash, a product inside the Uber app that matches passengers with the closest driver, whether that’s a Comfort taxi or an Uber driver, could continue even if Grab buys Uber, as the Uber app was retained in China after its operations there were acquired by Didi Chuxing.

But outside of any Grab-Uber deal, Maybank KimEng pointed to two positives from the Ministry of Transport’s budget.

Rail fares could rise

First, rail fairs could rise as commuters are made to share the cost increases of improving service standards, the note said.

”Comfort should benefit if there is any hike in the rail fare as it shares the fare revenue with the government,” Maybank KimEng said, estimating that every 1 percent rail-fare increase will raise Comfort’s 2019 earnings before interest and tax, or EBIT, by 0.05 percent.

The second positive, Maybank KimEng said, was that further regulation of private-hire car services, operated by Uber and Grab, could benefit Comfort’s taxi unit as it “could further level the playing field.”

It rates the stock at Buy with a S$2.35 price target.

The stock ended Friday down 1.94 percent at S$2.02.

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